Loading...
HomeMy WebLinkAboutBack-Up from Law DeptThe 2019 Florida Statutes Title XIV Chapter 218 View Entire TAXATION AND FINANCIAL MATTERS PERTAINING TO POLITICAL Chapter FINANCE SUBDIVISIONS 218.385 Local government bonds; sale.— (1) All general obligation bonds and revenue bonds sold by a unit of local government, as defined in s. 218.369, shall be sold at public sale by competitive bids at such place or places as the governing body shall determine to receive proposals for the purchase of such bonds. Notice of such sale shall be published one or more times at least 10 days prior to the date of sale in one or more newspapers or financial journals published within or without the state and shall contain such terms as the governing body shall deem advisable and proper under the circumstances. However, if the governing body shall by resolution adopted at a public meeting determine that a negotiated sale of such bonds is in the best interest of the issuer, the governing body may negotiate for sale of such bonds. (a) In the resolution authorizing the negotiated sale, the local governing body shall provide specific findings as to the reasons requiring the negotiated sale. (b) A resolution authorizing a negotiated bond sale may be the same resolution as that authorizing the issuance of such bonds. (2) Prior to the award of bonds, all proposals for the purchase of any bonds offered by a unit of local government as defined in s. 218.369 shall include a truth -in -bonding statement in substantially the following form: The (insert unit of local government) is proposing to issue $ (insert principal) of debt or obligation for the purpose of (insert purpose) . This debt or obligation is expected to be repaid over a period of (insert term of issue) years. At a forecasted interest rate of (insert rate of interest) , total interest paid over the life of the debt or obligation will be $ (insert sum of interest payments) . (3) Truth -in -bonding statements shall also include language in substantially the following form: The source of repayment or security for this proposal is the (insert the unit of local government) existing (insert fund) . Authorizing this debt or obligation will result in $ (insert the annual amount of (insert unit of local government) (insert fund) moneys not being available to finance the other services of the (insert unit of local government) each year for (insert the length of the debt or obligation) . (4) All proposals for the purchase of any bonds offered by a unit of local government shall be opened in public. Such bonds when competitively bid shall be awarded by resolution to the lowest bid consistent with the notice of sale. (5) No bid conforming to the notice of sale may be rejected unless all bids are rejected. If all bids are rejected, such bonds may be sold thereafter at public sale by competitive bids or by negotiated sale pursuant to this section. (6) In the event the local governing body decides to negotiate for a sale of bonds, the managing underwriter, or financial consultant or adviser if applicable, shall provide to the unit of local government, prior to the award of bonds to the managing underwriter, a disclosure statement containing the following information: (a) An itemized list setting forth the nature and estimated amounts of expenses to be incurred by the managing underwriter in connection with the issuance of such bonds. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided it includes only minor items of expense which cannot be easily categorized elsewhere in the statement. (b) The names, addresses, and estimated amounts of compensation of any finders, as defined in s. 218.386, connected with the issuance of the bonds. (c) The amount of underwriting spread expected to be realized. (d) Any management fee charged by the managing underwriter. (e) Any other fee, bonus, and other compensation estimated to be paid by the managing underwriter in connection with the bond issue to any person not regularly employed or retained by it. (f) The name and address of the managing underwriter or underwriters, if any, connected with the bond issue. (g) Any other disclosure which the local governing body may require. This subsection is not intended to restrict or prohibit the employment of professional services relating to local government bond issues. (7) The failure of a unit of local government to comply with one or more provisions of this section or s. 218.38 shall not affect the validity of the bond issue; however, upon such failure to comply, the unit of local government shall be subject to the sanctions provided in s. 218.38(3). (8) The truth -in -bonding statements prepared pursuant to this section are for informational purposes only and shall not affect or control the actual terms and conditions of the debt or obligations. History.—s. 1, ch. 80-98; s. 125, ch. 81-259; s. 3, ch. 82-195; s. 84, ch. 92-142. The 2019 Florida Statutes Title XIV Chapter 218 View Entire TAXATION AND FINANCIAL MATTERS PERTAINING TO POLITICAL Chapter FINANCE SUBDIVISIONS 218.386 Bonds; finder's fees prohibited.— (1)(a) As used in this section, "finder" means a person who is not regularly employed by, or not a partner or officer of, an underwriter, bank, banker, or financial consultant or adviser and who enters into an understanding with either the issuer or the managing underwriter, or both, for any paid or promised compensation or valuable consideration directly or indirectly, expressly or impliedly, to act solely as an intermediary between such issuer and managing underwriter for the purpose of influencing any transaction in the purchase of such bonds. (b) No underwriter, commercial bank, investment banker, or financial consultant or adviser shall pay any finder any bonus, fee, or gratuity in connection with the sale of general obligation bonds or revenue bonds issued by any unit of local government, unless full disclosure is made to the unit of local government prior to or concurrently with the submission of a purchase proposal for bonds by the underwriter, commercial bank, investment banker, or financial consultant or adviser and subsequently in the official statement or offering circular, if any, detailing the name and address of any finder and the amount of bonus, fee, or gratuity paid to such finder. (2) The willful violation of this section is a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. (3) No violation of this section shall affect the validity of the bond issue. History.—s. 2, ch. 80-98; s. 3, ch. 82-195. CITY OF MIAMI, FLORIDA DEBT MANAGEMENT POLICY L PURPOSE The purpose of this policy is to establish parameters and provide guidance governing the issuance, management, continuing evaluation of and reporting on all debt obligations issued by the City of Miami, and to provide for the preparation and implementation necessary to assure compliance and conformity with this policy. II. POLICY STATEMENT Under the governance and guidance of Federal and State laws and the City's Charter, ordinances and resolutions, the City may periodically enter into debt obligations to finance the construction or acquisition of infrastructure and other assets or to refinance existing debt for the purpose of meeting its governmental obligation to its residents. It is the City's desire and direction to assure that such debt obligations are issued and administered in such fashion as to obtain the best long-term financial advantage to the City and its residents, while making every effort to maintain and improve the City's bond ratings and reputation in the investment community. The City may also desire to issue debt obligations on behalf of external agencies or authorities for the purpose of constructing facilities or assets, which further the goals and objectives of City government. In such case, the City shall take reasonable steps to confirm the financial feasibility of the project and the financial solvency of the borrower; and, take all reasonable precautions to ensure the public purpose and financial viability of such transactions. The City shall not issue debt obligations or utilize debt proceeds to finance current operations of City Government. This Debt Management Policy shall be reviewed periodically by the City's Finance Director and Finance Committee, and updated, revised, or enhanced as necessary. III. FINANCE COMMITTEE It is the responsibility of the Finance Committee to review and make recommendations regarding the issuance of debt obligations and the management of outstanding debt. The Finance Committee shall consist of seven voting members consisting of five members from the local business community appointed by the City Commission, the Mayor or his designee, and the City's Finance Director as the City Manager's designee. Others who may be present at meetings of the Finance Committee to provide technical expertise and advice shall include representatives from the City Attorney's office, the Budget Department, the Department to which the proposed debt may relate, the City's Financial Advisor, Bond Counsel and Disclosure Counsel. Meetings will be open to all interested parties and official minutes will be taken and copies made available upon request to the City Clerk. The Finance Committee will consider all issues related to outstanding and proposed debt obligations, and will vote on issues affecting or relating to the credit worthiness, security and repayment of such obligations, including but not limited to procurement of services, structure, repayment terms and covenants of the proposed debt obligation, and issues which may affect the security of the bonds and ongoing disclosure to bondholders and interested parties. IV. GENERAL DEBT GOVERNING POLICIES The City hereby established the following policies concerning the issuance and management of debt: 1 A. The City will not issue debt obligations or use debt proceeds to finance current operations. B. The City will utilize debt obligations only for acquisition, construction or remodeling of capital improvement projects that cannot be funded from current revenue sources or in such cases wherein it is more equitable to the users of the project to finance the project over its useful life. C. The City will measure the impact of debt service requirements of outstanding and proposed debt obligations on single year, five, ten and twenty year periods. This analysis will consider debt service maturities and payment patterns as well as the City's commitment to a pay as you go budgetary capital allocation. D. The City will evaluate the long-term operational impact of capital projects to the City's budget and five-year financial plan. Each proposed debt issuance will be accompanied by a statement from the City Manager stating the estimated operational impact of the project being financed. E. The City may periodically refinance debt to take advantage of lower interest rates which will result in a Present Value Savings. The City may issue current refunding bonds that result in a minimum of three percent (3%) Net Present Value savings, and advance refunding bonds that result in a minimum of five percent (5%) Net Present Value savings. Refunding bonds shall not extend the final maturity of the bonds being refunded. If the present value savings is less than the threshold, or will result in a present value loss, and/or the maturity is greater than the maturity on the debt obligations to be refunded, the City may issue or enter into refunding Debt obligations but only after a finding by the Commission that a compelling public policy objective would be achieved by the refunding, such as eliminating restrictive bond covenants or providing additional financial flexibility. The Commission's findings may be based on a report presented with the legislation authorizing the refunding. V. METHOD OF SALE AND SELECTION OF UNDERWRITERS A. Florida law dictates that the City sell its bonds through a competitive sale unless it makes a finding based on the recommendation of its financial advisor that the circumstances warrant a negotiated sale. B. For each bond sale that is determined to be a negotiated sale, the City's Finance Director will formally request proposals from the firms within the pool in order to select the underwriting syndicate, including a senior manager or lead book runner, for that bond sale. The Finance Director will directly request proposals from the firms in the pool, and rank the proposals with a review committee. The review committee will be made up of the City Treasurer and the Assistant City Manager/CFO. Once the review committee recommendation is determined, the Finance Director will present the recommendation to the Finance Committee. C. All debt shall be sold at public sale by Competitive Bid unless waived by the Commission under the following circumstances: a. upon written recommendation of the City Manager and Financial Advisor, and by majority vote of the entire membership of the Commission that a waiver of competitive bids is in the best interest of the County. The City Manager's written recommendation shall set forth specific findings as to the reasons a negotiated sale is recommended; or 2 b. by an affirmative four -fifths vote (4/5) vote of the entire membership of the Commission, provided that the Commission makes specific findings as to the reasons why a negotiated sale is in the best interest of the City. VI. DEBT POLICY RATIO TARGETS This section of the Debt Management Policy establishes the target debt ratios for the City to consider in measuring debt capacity and flexibility. As the City periodically addresses its ongoing needs, the City Manager and the City Commission must ensure that the future elected officials will have the flexibility to meet the capital needs of the City. Since neither State law nor the City Charter provides any limits on the amount of debt, which may be incurred (other than the requirement to have General Obligation debt approved in advance by referendum), this policy establishes the following targets which at the same time provide future flexibility. General Government Debt Service as a percentage of Non -Ad Valorem General Fund Revenues: Calculation is determined as all general governmental debt service (special obligation and non -ad valorem secured debt, exclusive of General Obligation and proprietary fund revenue secured debt) divided by non -ad valorem revenues. Goal/Target Less than or equal to 15% Net Debt Per Capita: Calculation is determined as Net Debt Per Capita shall be calculated by dividing the Governmental Net Debt by the most current population within the City. Goal/Target Less than or equal to $2,000 Net Debt to Taxable Assess Value: Calculation is determined as dividing the Net Debt by the taxable assessed value of all taxable properties within the City. Goal/Target Less than or equal to 5% VII. CONTINUING DISCLOSURE AND ONGOING REPORTING A. The City shall strive to meet all continuing disclosure and ongoing reporting requirements on a timely basis. The City has agreed, in accordance with the provisions of, and to the degree necessary to comply with, the secondary disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission. B. The City shall implement documented post -issuance compliance procedures upon each debt issuance. C. The City shall utilize a nationally recognized dissemination agent (such as DAC) for continuing disclosure. D. The City, through the City Manager or designee, shall provide a report to the City Commission on an annual basis describing the City's debt position. VIII. OTHER PROVISIONS The following other provisions shall be applicable to the City each time it considers a debt issuance: A. Purposes of Issuance — The City will issue debt obligations for acquiring, constructing or renovating Capital Improvements or for refinancing existing debt obligations. Projects must be designed as public purpose projects by the City Commission prior to funding. B. Maximum Maturity — All debt obligations shall have a maximum maturity of the earlier of: (i) the estimated useful life of the Capital Improvements being financed; or, (ii) thirty years: or, (iii), in the event they are being issued to refinance outstanding debt obligations the fmal 3 maturity of the debt obligations being refinanced, unless a longer term is recommended by the Finance Committee. C. Capitalized Interest (Funded Interest) — Subject to Federal and State law, interest may be capitalized from date of issuance of debt obligations through the completion of construction for revenue producing projects. Interest may also be capitalized for projects in which the revenue designated to pay the debt service on the bonds will be collected at a future date, not to exceed six months from the estimated completion of construction and offset by earnings in the construction fund. D. Bond Covenants and Laws — The City shall comply with all covenants and requirements of the bond resolutions, and State and Federal laws authorizing and governing the issuance and administration of debt obligations. E. Good Faith Deposit - The City shall receive a Good Faith Deposit at the time of award to the Underwriters regardless of the method of sale. The purchaser of the Debt or Underwriter shall pay the good faith deposit (security deposit on the bonds) to the City in an amount equal to approximately one percent (1%) of the par amount of the Debt being issued. F. Interest Rate Derivatives and Swaps — The City shall not use interest rate derivatives, or swaps, as a debt management tool. G. Investment of Bond Proceeds — Investment of Bond Proceeds shall be consistent with the City's Investment Policy. 4